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The Trillion Dollar Coin Scam

I guess this harebrained idea is getting enough attention that some debunking is in order. The idea is for the U.S. Mint to manufacture a trillion dollar coin, deposit it with the Federal Reserve, and then draw the money gradually out of that fund. The key statute cited is 31 USC 5112(k):

The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

Once the coin is minted, another statute comes into play, 31 USC 5136, which among other things says this about the Mint’s deposit fund:

[T]he Fund may retain receipts from the Federal Reserve System from the sale of circulating coins at face value for deposit into the Fund….

Now, I’m no expert on monetary policy and government finance, but when I read this last statute, it clearly refers to “circulating coins” rather than other kinds of coins like “numismatic coins” and “bullion coins.” These last two terms are also used in the statutes in contradistinction to “circulating coins” which are “available for ordinary commerce in packaging of sizes and types appropriate for and useful to ordinary commerce, including rolled coins.”

So it seems like the plain language of the statutes argues against this trillion dollar coin scheme. The Federal Reserve banks have no need for such a thing. But even if I’ve somehow misread the statutes, clearly Congress never intended such a bizarre thing as a trillion dollar platinum coin, which is far outside the realm of any reasonable discretion. If we use our imaginations, and suppose that Congress really did intend to delegate that much discretion, then surely it would amount to an unconstitutional delegation of legislative power.

I used to collect coins when I was a kid, and it would have been nice to have one of these in my collection, but that’s just a silly fantasy, like the entire scheme.

UPDATE (Jan. 12, 2013): Looks like the stupid idea is now officially dead.

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